2020 Environmental, Social, and Governance (ESG) Report
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中石化石油工程技术服务股份有限公司 Sinopec Oilfield Service Corporation 2020 Environmental, Social, and Governance (ESG) Report
Transcript of 2020 Environmental, Social, and Governance (ESG) Report
中石化石油工程技术服务股份有限公司
Sinopec Oilfield Service Corporation
2020 Environmental, Social, and
Governance (ESG) Report
Contents
About the Report ........................................................................................................................... 1
Scope of the Report ..................................................................................................................... 1
Explanation of the Report ............................................................................................................ 1
Confirmation and Approval ......................................................................................................... 1
ESG Management System ............................................................................................................ 2
ESG Concept ............................................................................................................................... 2
ESG Management Structure ........................................................................................................ 2
Communications with Stakeholders and Assessment of Importance of Key Issues ................... 3
Occupational Health and Safety Assurance ................................................................................ 5
Management System Assurance .................................................................................................. 5
Work Safety Management ........................................................................................................... 5
Protection of Occupational Health ............................................................................................ 12
Environmental Management ...................................................................................................... 14
Resource Usage ......................................................................................................................... 14
Clean Production ....................................................................................................................... 17
Risks and Opportunities of Climate Change ............................................................................. 21
Ecological Protection ................................................................................................................ 24
Quality Control ............................................................................................................................ 25
Improvement of Management System ....................................................................................... 25
Quality Control of Projects ........................................................................................................ 25
Service Quality Management .................................................................................................... 26
Operation in Compliance with Laws and Regulations ............................................................. 28
Integrity Development ............................................................................................................... 28
Protection of Intellectual Property Rights ................................................................................. 29
Protection of Information Security ............................................................................................ 29
Management of Supply Chain ................................................................................................... 30
Staff Management ....................................................................................................................... 31
Legal Employment .................................................................................................................... 31
Salary and Benefits .................................................................................................................... 33
Employee Activity ..................................................................................................................... 33
Employee Development ............................................................................................................ 34
Community Investment............................................................................................................... 38
Environmental Public Welfare .................................................................................................. 38
Community Public Welfare ....................................................................................................... 39
Overseas Responsibility ............................................................................................................ 42
Epidemic Prevention and Control ............................................................................................. 44
Health and Safety Assurance ..................................................................................................... 44
Community Donations .............................................................................................................. 45
Appendix：Environmental, Social and Governance Reporting Guide .................................. 48
1
About the Report
Scope of the Report
The 2020 Environmental, Social and Governance (ESG) Report (hereinafter referred to as
the "ESG Report") of Sinopec Oilfield Service Corporation (hereinafter referred to as
"Sinopec Oilfield Service" or the "Company" or "we") aims to give an objective and fair
view of the important performance of environmental, social, governance and other aspects
of the Company. For details of the governance part, please read in conjunction with the
section “Corporate Governance” in Sinopec Oilfield Service Corporation Annual Report
2020 to help readers understand the Company more comprehensively. Unless otherwise
specified, the scope of the Report includes Sinopec Oilfield Service Corporation and its
subsidiaries, with the reporting period from 1 January 2020 to 31 December 2020
(hereinafter referred to as the “Year”). In order to enhance the comparability and
completeness of the Report, part of the content is appropriately extended beyond the
reporting period.
Explanation of the Report
The Report has been prepared in accordance with Appendix 27 “Environmental, Social and
Governance Report Guideline” to the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (hereinafter referred to as “Hong Kong Stock
Exchange”), the “Notice on Strengthening Listed Companies’ Undertaking of Social
Responsibilities and Issuance of “Guidelines on Environmental Information Disclosure by
Companies Listed on Shanghai Stock Exchange” and the “Guidelines on Environmental
Information Disclosure by Companies Listed on Shanghai Stock Exchange”.
The information and cases in the Report are extracted from the original records of actual
operations of Sinopec Oilfield Service Corporation and its subsidiaries. The Report is
published in three languages: Simplified Chinese, Traditional Chinese and English. In case
of discrepancy between the texts, the simplified Chinese version shall prevail. The
electronic version of the Report can be downloaded from and read on the official website
of Sinopec Oilfield Service, the official website of the Shanghai Stock Exchange and the
website of the Hong Kong Stock Exchange.
Confirmation and Approval
The Report was approved by the second meeting of the Tenth Board of Directors on 24
March 2021 upon confirmation by the management.
2
ESG Management System
ESG Concept
Upholding the core values of “being people-oriented, and pursuing good quality,
innovation and win-win results", Sinopec Oilfield Service Corporation implements the
development strategy of "specialization, marketization, internationalization, high-end
orientation, specialization," and practices the development philosophy of "serving
customers, supporting oil and gas , taking the lead in technology, creating value", to fulfill
its commitment to building itself into a world-class comprehensive oil service company.
We insist on paying attention to the health and safety of employees, attach importance to
project quality control, pursue the goal of "zero injury, zero pollution, and zero accidents",
strive to achieve safe operation and green and low-carbon development, and at the same
time actively perform social responsibilities and give back to the community. We will
continue to improve corporate governance, integrate environmental, social and governance
concepts into corporate culture, create more value for stakeholders, thus contributing more
to the harmonious development of society.
ESG Management Structure
The Company continues to improve the ESG management structure, implement the
concept of sustainable development, and promote the implementation of ESG management.
The Board of Directors is responsible for formulating the overall ESG strategy and making
decisions on major ESG-related matters. In combination with the Company’s current
management organization structure, the Company has conducted comprehensive
management at all levels of ESG through Administrative Department, Safety and
Environmental Protection Department, Engineering Technology Department, Department
of Party Work, Human Resources Department, Marketing Department, Technology and
Information Department, Materials and Equipment Department, and Discipline Inspection
and Audit Department.
3
Communications with Stakeholders and Assessment of Importance of
Key Issues
The Company continues to improve its management of environmental, social and
governance. Combined with the characteristics of the overall business and operational
activities, it identifies the main stakeholders, including shareholders and investors,
government and regulatory agencies, shareholders and investors, employees, suppliers,
customers, partners, communities and the public. In the process of ESG management, the
Company improves the communication mechanism to maintain good communication with
major stakeholders through multiple channels, deepens the understanding of the
requirements of various stakeholders, responds to the expectations and demands of
stakeholders in a timely manner, in order to consolidate the mutual benefit and win-win
results.
Summary of major communication channels and concerns of stakeholders of Sinopec
Oilfield Service
Stakeholders Communication channels Topics of concern
Government
and
regulators
Important conferences, Policy
advisory, Case report, Inspection,
Documents exchange, Information
disclosure
Operation compliance
Corporate governance
Energy conservation
Shareholder
and other
investors
Shareholders’ meeting,
Periodical report, Interim report
Profitability
Operating strategy
Transparent disclosure
Clients Client visits, Client satisfaction
survey
Service quality
Information security
Employees Employee satisfaction survey,
Employee activity, Employee
training, Internal publication
Salary and welfare
Development and training
Occupational health and
safety
Suppliers Supplier identification,
Communication meeting
Fair cooperation
Honest agreement
Partners Strategic cooperation talks, Bilateral
talks
Fair cooperation
Honest agreement
Joint development
Community
and the
public
Public benefit activities, Community
activities, Recruitment talks,
Opportunity of internship
Community relationship
Employment promotion
Community investment and
public welfare
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Based on the feedback obtained through communication with stakeholders, we have
summarized the stakeholders' focus on the Company's ESG field. The important ESG
issues identified by the Company in 2020 include "health and safety", "product
responsibility", "emissions", and "climate change"; related topics include "the environment
and natural resources", "use of resources", "employment", "development and training".
"labor standards", "supply chain management", "anti-corruption", and "community
investment". We will respond to the content of each topic separately in the Report.
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Occupational Health and Safety Assurance
The Company strictly abides with requirements of the Safety Production Law of the
People's Republic of China, the Law of the People’s Republic of China on Prevention and
Control of Occupational Disease, the Special Equipment Safety Law of the People’s
Republic of China and other laws and regulations. The company will continue to improve
the HSSE management system, strengthened the safety production management, and
provided comprehensive protection for the occupational health of employees.
Management System Assurance
The Company adheres to the concept of "safety
and environmental protection first, keeping
physical and mental health, always being strict",
and continued to promote the improvement and
implementation of the HSSE management
system. During the Year, the Company revised
the HSSE Inspection Management Regulations
and other management systems, and issued the
HSSE Management System for Petroleum
Engineering Company (2020 Edition), covering
onshore geophysical exploration, drilling,
logging, mud logging, cementing, downhole operation, pipe tools and offshore drilling,
offshore downhole operation and other business lines, to improve the overall management
quality of HSSE, realize the effective unification of regulations, standards and systems,
and provide standardized guidance for effectively ensuring the occupational health and
safety of employees.
Work Safety Management
The Company has attached great importance to work safety management to
comprehensively guaranteed the safety of employees in production operations. Through
In 2020, the Company compiled the Petroleum
Engineering HSE Standards Compilation Manual
(2020 Edition) to systematically organize
effective standards covering all business lines to
standardize the behaviors of various professions
to ensure work safety in the petroleum
engineering sector, promote the standardized
construction of job sites, and improve site safety
management, with an ultimate goal of building a
world-class oil service company.
▲HSSE Management System for
Petroleum Engineering Company
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the strengthening of on-site safety management, the improvement of emergency control
mechanisms, the implementation of safety education and the innovation of safety
technology, we have continuously improved the level of work safety management,
comprehensively reduced the risk of accidents, and committed to creating a safe working
environment for employees.
On-site Safety Management
Orderly on-site safety management is inseparable from standardized management and
control procedures. During the Year, the Company formulated the Safety Production
Responsibility System for Petroleum Engineering Company Headquarters and Petroleum
Engineering Company HSSE Inspection Management Regulations, and strictly
implemented the Ten Measures for Strengthening the Safety Management of Direct
Operations, Management Measures of Safety Score for All Staff and other systems to
improve the standardized construction of on-site safety management.
We have updated the safety classification inspection and assessment mechanism,
supervised the corresponding risks level by level, implemented the assessment and
accountability system at all levels, effectively strengthened the implementation of safety
management responsibilities, made the inspection accountability system more reasonable,
thus effectively promoting on-site safety management.
The Company also constantly improves the on-site safety inspection mechanism. In 2020,
based on the concept of “safety management is a necessity in business operation”, the
Company has fully optimized the on-site safety inspection process, strictly implemented
the safety responsibilities of each unit, and achieved full coverage of inspections. The
Company has formulated and followed the Interim Management Regulations on Ordering
Suspension and Personnel Leaving Office at Construction Sites in Petroleum Engineering,
sorted out the problems found in the inspection by professional category, and clarified the
responsible department for follow-up tracing and guidance on rectification. We required
construction sites with major hidden dangers and that cannot guarantee safe operations to
suspend work for rectification, and to carry out off-job training for personnel with serious
shortages of knowledge or skills for their posts and personnel with serious violations of
regulations.
At the same time, the Company has actively conducted training-style inspections, and
provided guidance and support for difficult issues while proposing rectification suggestions
on identified problems. In 2020, project on-site safety inspections and rectification have
achieved significant results, and the number of projects in the drilling crew with hidden
dangers has decreased by 33% on average. In addition, the Company has also implemented
a work permission system, by which it organizes centralized training for those who approve
and supervise relevant projects, to ensure 100% of these people holding relevant
certificates.
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Technology for Strengthening Safety
The Company continues to improve the level of safety-related technologies by actively
promoting the research and development. We organize and carry out safety technology
research on difficult issues, stimulate employees' motivation for safety technology
Video monitoring platform
The Company has promoted the construction of a real-time video monitoring
platform for production and operation sites, which has gradually realized full
coverage of the operation sites. As of November 2020, upon the launch of the
official version of the video monitoring platform, except for offshore operation sites,
all regional (professional) companies and their professional operating units have
established their own platforms and connected to the petroleum engineering
production video monitoring platform, with an access rate of up to 93.4%.
The use of the video monitoring platform has improved the safety monitoring
performance of the drilling operation site, realized the interconnection between the
back-end monitoring management department and each construction site, providing
technical support for preventing and containing the occurrence of major accidents.
Through real-time communication and remote guidance, we timely and effectively
identified and solved potential safety hazards in the weak links of safety production
to reduce accident risks and improve the efficiency of on-site safety management.
During the Year, the Company headquarter carried out video spot checks on the
operating well sites for a total of 120 times, discovered and supervised the
rectification of 376 potential hazards. We conducted key observations on high-risk
operations reported by frontlines and implemented on-site and video monitoring. As
of the end of 2020, the Company has carried out video safety observations for
operating wells for 34,519 times, which has played an important role in warning and
education of violations and discovery of hidden dangers at the operation site.
▲Real-time monitoring of production sites
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innovation, research and solves on-site problems, reduces safety risks, and uses scientific
and technological means to ensure safe production.
In order to strengthen the exchange, publicity and application of safety technology, the
Company has built a safety technology exchange platform. Through the "Safety and
Environmental Protection" column on the official website, the Company monthly releases
the Safety technology Information for Petroleum Engineering, which covers domestic and
foreign petroleum engineering safety technology trends, corporate safety technology and
equipment innovation, and safety standardization information, promoting the sharing of
safety technology information on the frontline and safety standardization construction. In
addition, we held 4 "Safety Lectures", with a total of more than 880 people from 18
companies participating in the seminars, promoting exchanges in safety technology, the
publicity of safety technology standards and the management experience exchanges.
In 2020, the Company has carried out a number of safety technology research projects
including "Drilling Column Automation Complete Equipment Technology", "Technology
Research on the Application of Intelligent Detection and Early Warning of Hydrogen
Sulfide Spectrum at Wellsite", "Research on the Sulfur Prevention Technology of Blowout
Prevention Facilities for High Sulfur Wells", and " Research and Application of Safety
Video Intelligent Analysis System at Drilling Operation Site". The company actively
promoted the application of new equipment such as the integrated back-pressure valve snap
connection device, intelligent electronic posture device, top-driven and two-deck anti-
collision device, derrick disassembling and installation safety device, wire rope non-
destructive detectors, etc., introduced and applied well-established technologies such as
drilling safety monitoring and intelligent protection devices, and electronic intelligent
ignition devices. These safety technology innovations and applications have provided a
more comprehensive guarantee for production safety.
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Research on the application of intelligent detection and early warning of
hydrogen sulfide spectrum in wellsite
The Company has independently developed a wellsite hydrogen sulfide spectrum
intelligent detection and early warning device, which replaces the hydrogen
sulfide detection technology that relies on hydrogen sulfide electrochemical
sensors used in traditional drilling wellsite. Based on the spectral gas detection
technology, it has realized the continuous detection of hydrogen sulfide gas and
multi-level optical intelligent warning at the wellsite. The device is featured by
wide detection range (0-1000ppm), high stability, longevity, etc., with explosion-
proof function, and can adapt to complex temperature and environmental
conditions. Its hydrogen sulfide response time can be advanced by 2 seconds
compared with traditional hydrogen sulfide detection technology, saving time for
the timely treatment of hydrogen sulfide gas at the well site, eliminating serious
safety hazards in drilling operations in high-sulfur oil and gas fields, and thus
ensuring the safety of drilling operations.
▲Intelligent detection and early warning device for hydrogen sulfide spectrum
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Implementing Safety Education
The Company actively carries out employee safety education to continuously raise
employee safety awareness. In 2020, the Company has established 11 safety practice bases,
all of which have been put into use. A total of 3,093 intensive shift training sessions were
organized throughout the year, in which 108,000 person-times participating, with an
average shift training time of 16.7 days per person; and 253,000 person-times participated
in training issuing certificates and professional training, etc. We also actively improved the
competence and quality of full-time safety supervisors by organizing comprehensive
Research on the sulfur prevention technology of blowout prevention facilities
for high sulfur wells
The Company has carried out research on the sulfur prevention technology of
blowout prevention facilities for high-sulfur wells. Targeting at the “three highs”
characteristics of high sulfur content, high pressure, and high production of high-
sulfur carbonate gas reservoirs in southwestern China, it welded sulfur-resistant
alloy in ram blowout preventer, drilling four-way and flat valve inner cavity in
contact with drilling fluid of newly purchased well control main equipment to
improve the sulfur resistance and corrosion resistance; used the booster hydraulic
cylinder to cut the ram blowout preventer to improve the shearing capacity of
blowout prevention device; supplemented the purchase of FKQ144012 control
system to meet the demand for increasing the use of booster cylinders. This
measure has effectively solved the corrosion problem of drilling well control
equipment and facilities, and reduced the safety risks of exploration and
development, thereby improving the safety assurance capability of well control
equipment for the "three highs" wells, and the on-site emergency response
capability.
▲Improve well control equipment of "three highs" wells to ensure safety
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training for safety directors, and rotation training for a total of 4,255 person-times of full-
time HSE management personnel.
At the same time, we regularly conduct case analysis and reflection, organized in-depth
"inspection of ideas, investigation of management, investigation of technology" activities,
and followed up and rectified supervise plans for prominent problems in the field of safety
and environmental protection, and implemented relevant rectification.
Emergency Safety Control
The Company strictly follows the Safety Production Law of the People's Republic of China,
Emergency Response Law of the People's Republic of China and other laws and regulations
to establish an emergency management command system, so as to continuously promote
the standardization of emergency procedures, and improve on-site emergency management
capabilities.
All regional (professional) companies have established emergency command centers,
which, under the overall framework of the integrated cloud platform (ICP) project, based
on the three major platforms of the production operation system, the wellbore business
integration platform, and the production video monitoring platform, have integrated
resources to build emergency management centers, forming an emergency command and
management system that facilitates coordination at different levels.
The Company actively strengthens the construction of voluntary emergency response
teams on the frontline. Through clarifying responsibilities and division of labor,
strengthening daily targeted training, regularly carrying out combat drills, continuously
improving emergency plans and emergency response cards, we has effectively improved
emergency response and "team fighting" capabilities. During the Year, the Geophysical
Company organized a three-level joint emergency drill for the loss of civilian explosives
in the Mianzhu project in Sichuan.
In 2020, the Company has promoted the standardized construction of the well control
abnormal management reporting mechanism and established a statistical analysis system
for overflow and lost circulation to clearly standardize the reporting process and emergency
handling of abnormal conditions. The Company conducted monthly analysis on overflow,
lost circulation and other well control abnormalities and downhole complex faults, to
formulate emergency preventive measures based on the characteristics of regional
construction.
In 2020, we carried out "Four ‘No’ and Two ‘Direct’" safety inspections, supervised the
rectification of problems identified, and conducted video inspections of 36 drilling teams
in response to dangers of natural disasters such as typhoons, heavy rains, floods, landslides,
based on the characteristics of the construction area to effectively implement on-site
preventive measures to ensure safe production during rainy and flood seasons.
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Protection of Occupational Health
The Company attaches great importance to employee occupational health management,
strictly abides by the Safety Production Law of the People's Republic of China,
Occupational Disease Prevention Law of the People's Republic of China and other
regulations and industry standards, and continuously improves the occupational health
management system by adopting comprehensive occupational disease protection and labor
safety protection measures to provide multiple safeguards for the occupational health of
employees.
The Company stipulates that occupational disease protection facilities must be put into use
at the same time as other production facilities, arranges occupational health management
personnel, and carries out special inspections and treatments for noise and dust exceeding
standards to provide employees with a good working environment. The Company regularly
organizes physical examinations for all employees, provides mental health consulting
services, and conducts health assessments, formulates "one person, one policy" health
intervention plans and follow-up monitoring for high-risk personnel, and improves
emergency medical and treatment conditions and equipment by providing automatic
external defibrillator (AED) in qualified places. The Company has continuously improved
its labor protection equipment, completed the management system and the quality control
of labor protection supplies, and organized special inspections on labor protection supplies.
Meanwhile, the Company organizes and strengthens training and drills of various
occupational health emergency plans from time to time, upon which, it conscientiously
summarizes and evaluates the problems that arise in the drills, to effectively improve the
emergency response ability of all employees.
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Drilling platform's rapid automatic mixing and weighting system device to avoid
dust hazards
A drilling team of Zhong Petroleum Engineering Company earnestly carried out the
identification of occupational hazard factors in the workplace before operation, and
then established a list of occupational hazard factors to regularly conduct detection on
these factors and publish the result timely, and regulate the use of labor protection
equipment. During the on-site construction process, the team actively carried out
occupational hazard treatment by applying the rapid automatic mixing and weighting
system device independently developed by the said Company, to meet the
requirements for rapid aggravation of drilling fluid for well control safety, and at the
same time, to collect the dust generated during the aggravation process and reuse the
dust after filtration, so as to meet the national first-level emission standards, avoid
environmental pollution, and effectively reduce the barite dust that may cause harm to
the respiratory system of employees during the aggravation process, and avoid the risk
of occupational injury.
▲Drilling platform’s rapid automatic mixing and weighting system (before vs. after)
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Environmental Management
The establishment of ecological civilization is in the interest of the current and future
generations. The Company pays attention to the challenges of climate change, actively
responds to the national "30·60" carbon emission target1, and continues to practice the
green development mode. We strictly implements the Environmental Protection Law of
the People's Republic of China, Energy Conservation Law of the People's Republic of
China, Prevention and Control of Environmental Pollution by Solid Wastes of the Law of
the People's Republic of China and other relevant laws and regulations, formulates and
implements the HSSE Management System for Petroleum Engineering Company.
Throughout the business process, we manage to improve resource utilization efficiency,
deepen the clean production model, and effectively reduce the environmental impact
created by its businesses.
The Company actively implements environmental target management, signs HSSE
responsibility letters with regional (professional) companies to decompose various energy-
saving and emission-reduction indicators, in order to effectively control energy
consumption, water consumption, carbon emissions, and pollutant emissions and include
these factors in the annual assessment of the company and its management personnel, and
implement the accountability system for environmental goals at all levels.
Based on the characteristics of petroleum engineering services, the main gas emissions
generated during the Company's operations are greenhouse gases, which are derived from
the use of electricity and fuels converted from fossil fuels, mainly including carbon dioxide,
methane and nitrous oxide. In 2020, the greenhouse gas emissions of the Company were
2,856,100 tons, and greenhouse gas emissions per RMB10,000 was 0.553 tons.
Resource Usage
The Company strictly complies with various energy-saving regulations and operational
requirements of the countries and regions where we operate, and carries out "energy
efficiency improvement" plans to achieve resource conservation and energy efficiency
improvement.
Energy Saving and Consumption Reduction
The Company constantly promotes the application of new technologies and new devices
to promote energy conservation and consumption reduction. During the Year, the Company
exerted lots of efforts in promoting energy-saving technologies such as oil-to-gas, oil-to-
electricity, recovery of waste heat and pressure, and widely used new energy-saving
devices such as dual-fuel engines, energy-saving frequency conversion motors, electric
1 In 2020, Xi Jinping, the president of China, announced at the 75th Session of the United Nations General Assembly that “China will strive to peak its carbon dioxide emissions by 2030 and endeavour to achieve carbon neutral by 2060”.
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fracturing skids, and dynamic powerless compensation. At the same time, the Company
regularly checked and eliminated high-consumption and low-efficiency equipment, to
achieve energy conservation at the source.
During the Year, the Company focused on push forward the "Energy Efficiency
Improvement Plan", promoted the implementation of energy conservation projects by
technical and management means. As of the end of 2020, the Company has implemented
11 "Energy Efficiency Improvement Plan" projects, with a total investment of RMB53.31
million, realizing benefits of RMB114,148,400, and saving 83,400 tons of standard coal.
The Company advocates a green office mode and actively implements resource
conservation measures. In daily work and life, the Company guides employees to conduct
a green work mode by issuing and posting proposals and energy-saving reminder cards.
We launch the "Empty Plate Campaign" to guide employees to practice economy. We
encourage employees to participate in green and low-carbon activities to enhance their
awareness of green environmental protection, and cultivate good habits in leading a low-
carbon life.
In 2020, the comprehensive energy consumption per RMB10,000 of industrial output is
0.266 tons of standard coal, compared with 0.273 tons of standard coal per RMB10,000 in
2019, a decrease of 0.007 tons of standard coal. In 2020, the Company completed 727 wells
with grid-powered rigs with a drilling footage of 1,645,656.35 meters, which consumed
694.80893 million kilowatt hours of electricity, replacing 201,030 tons of diesel, and
saving energy consumption of 207,530 tons of standard coal.
Water Conservation
The Company comprehensively promotes the application of water-saving technology and
the comprehensive utilization of wastewater recycling, strengthenes the basic water-saving
management in the project operation process, and standardizes the process management of
statistics, analysis, and improvement on water resources consumption. We makes full use
of unconventional water sources such as rainwater, ditch water, operation waste liquid, and
domestic sewage in the factory area, to increase the recycling of drilling fluid, and recover
all drilling and operation wastewater. At the same time, the Company improvex the
treatment and utilization technology of fracturing flowback fluid, greatly reducing the
amount of freshwater consumption, and achieving water-saving goals.
In 2020, the Company had used 7,032,500 cubic meters of industrial water, 1.89 cubic
meters per RMB10,000 of output.
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▲Energy saving with new technology and new equipment
Energy and resource use (Scope: domestic projects of Sinopec Oil Services
Headquarter and its subsidiaries)
Indicators 2020 2019
Total energy consumption (MWh) 8,435,975.87 8,698,665.78
Direct energy consumption (MWh) 6,981,385.04 7,395,279.24
Petrol 196,100.37 237,831.29
Diesel 6,101,731.29 6,494,251.88
Natural gas 620,548.62 603,926.49
Coal 5,408.06 11,535.04
Liquefied petroleum gas 9,333.15 825.50
Raw petroleum 10,767.73 11,282.72
Other Energy 37,495.82 35,626.32
Indirect energy consumption (MWh) 1,454,590.83 1,303,386.54
Electricity 1,293,611.43 1,137,170.93
Heating Power 160,979.40 166,215.61
The industrial production comprehensive
energy consumption (Tons of standard coal
/RMB 10,000)
0.266 0.273
Notes:
17
1 Energy consumption data is calculated according to the consumption of gasoline, diesel,
natural gas, coal, liquefied petroleum gas, crude oil, electricity, heat and other energy and
the conversion factor listed in the national standard of the People’s Republic of China of
General Principles for Calculation of Comprehensive Energy Consumption (GB/T 2589-
2008).
2 Other energy mainly refers to the fuel converted from fossil fuels such as waste oil.
3 The operation of the Company does not involve the use of packaging.
Clean Production
The Company strictly follows the laws and regulations of the places where it operates, and
has formulated the Environmental Protection Management Regulations, Clean Production
Management Regulations and Pollution Prevention and Control Management Regulations
and other related regulations, clarifying the duties, procedures, content and requirements
of cleaner production. We strictly controls the environmental risks in all aspects of the
production and operation process, extensively adopts clean energy, carries out air pollution
prevention and control, strictly controls waste generation, and properly disposes the waste.
In addition, the Company carries out clean production audits to strengthen on-site
supervision and promote the establishment of a long-term clean production mechanism.
Use of Clean Energy
The Company has made intensified efforts in promoting the use of clean energy. It has
been committed to the promotion of practical clean production technology, and the
implementation of clean energy projects such as grid-powered drilling, grid voltage
cracking, gas power, and solar cells to replace high-energy and high-emission equipment
and facilities. In production and operation, the Company preferred low-toxic or non-toxic,
harmless materials to make drilling fluids, acidized fracturing fluids, etc., to reduce the
negative impact on our environment.
▲Promote the application of clean energy
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Air Pollution Control
During the construction and operation of the project, the Company actively responds to the
government's warning for heavy pollution weather, and initiates emergency plans for such
warnings to effectively reduce air pollution. We have adopted measures such as increasing
the frequency of water spraying, laying dust-proof nets, diesel engine exhaust gas treatment
and grid-powered application, etc., to effectively reduce dust and exhaust gas emissions.
Wastewater Disposal
The Company strictly keeps in line the laws and regulations on pollutant emission, and
earnestly implements the relevant standards and regulations for sewage discharge. At the
construction site, construction teams at all levels would carry out anti-seepage, anti-
overflow, and anti-leakage measures, and strictly implement the centralized treatment of
industrial wastewater and domestic sewage. Based on process requirements, we have
increased the reuse of industrial wastewater and domestic wastewater, ultimately achieving
a reduction in wastewater discharge.
At the operation site, the Company has promoted the implementation of rain and sewage
separation, and anti-seepage and diversion measures, to strictly control sewage discharge.
In 2020, the Company has promoted the use of environment-friendly toilets on the frontline
of production, equipping a total of 591 sets of such toilets. We also provides emergency
materials including dirt collection bags, oil dispersants, woven bags, and absorbent felts
for the construction sites to respond to environmental emergencies. In the whole year,
526,000 cubic meters of domestic sewage, 255,000 cubic meters of drilling wastewater,
and 1.093 million cubic meters of operation wastewater were treated in compliance with
relevant regulations.
▲ Lime digestion greenhouse ▲ Laying dustproof nets in construction sites
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▲Centralized treatment of industrial wastewater and domestic sewage
Waste Disposal
The Company strictly complies with laws and regulations on waste disposal, and actively
promotes the recovery and comprehensive utilization of drilling fluid waste while drilling,
drilling fluid recycling, pollution-free operation of oil testing, and acid fracturing flowback
fluid. At the same time, the Company applies controllable seismic acquisition that is
seismic source adaptive, drone line inspection and other technologies to reduce and control
pollutant emissions, comprehensively reducing the negative impact of production on the
environment.
The Company strictly implements classification for general industrial solid waste,
hazardous waste and domestic waste, establishes a record account, and hires qualified
companies to recycle various solid wastes. For hazardous waste disposal, the Company sets
up temporary storage sites, and conducts monitoring on hazardous waste disposal by
external parties to ensure that hazardous wastes are properly disposed of in accordance
with laws and regulations.
At present, the waste generated during the operation of the Company mainly includes oil-
based drill cuttings and solid waste, of which oil-based drill cuttings are hazardous waste.
In 2020, the Company had disposed of 1.636 million tons of general solid waste through
harmless treatment or comprehensive utilization; 164,200 tons of oil-based cuttings
through thermal analysis and other processes; all in compliance with relevant regulations.
▲ Waste disposal
20
Environment-friendly toilet
To build a green enterprise, the Company has independently researched and
developed removable "modular environment-friendly toilets", which not only
improved the living conditions and environment of grassroots workers in the field,
but also had a positive impact on the promotion of rural health and the village
living environment. The "modular environment-friendly toilet" adopts a rapid
non-gravity-type multi-point collection system for waste, and a special airtight
collection and safety odor isolation system to keep the air clean and prevent the
spread of pathogens in excrement, and establish a "water-saving vacuum toilet".
The facility has the functions of sewage collection, automatic transportation
without height difference, remote monitoring on the cloud platform, dry
composting, and recycling of water resources, which fully meets the requirements
of building green stations at grassroots and green construction.
The use of "environment-friendly toilets" has solved the practical problems of
"high frequency of relocation", "long work hours in the field", and "limited
maintenance conditions" of grassroots operations, eliminated the impact of water
and electricity shortages in the field, and provided construction personnel with
convenience. At the same time, it is conducive to saving water, properly disposing
of domestic waste, the utilization of waste resources, and helping the building of
green enterprise.
▲ Monitoring platform for modular
environment friendly toilets
▲Modular environment friendly toilets
21
Risks and Opportunities of Climate Change
The Company is deeply aware of the increasing impact of global climate change on the oil
service industry. While practicing green and low-carbon operations, we have analyzed the
risks and opportunities of climate change we face with climate change scenarios, assessed
related impacts, and formulated countermeasures.
Risks Countermeasures
Physical risk Acute risks:
extreme
weather such
as typhoons
and heavy
rains
Damage to construction
sites, office buildings and
equipment, causing asset
losses;
Abnormal production
affected by equipment
damage, employees'
inability to work,
transportation interruption,
etc.;
Formulate emergency
response plans for natural
disasters, and continuously
improve the emergency
response mechanism for
natural disasters;
Identify potential asset
damage and purchase
necessary insurance;
Practicing the concept of environmental protection in overseas operations
We have strictly implemented "green exploration" overseas. For example, in Saudi
Arabia, we adopted the "one-character operation method" in which vehicles drive
along the same lane, without leaking a drop of oil. We sent waste engine oil, waste
tires and medical waste to designated and qualified plants for disposal. STP sewage
treatment equipment was used at the operation site to strictly control the sewage
discharge standards, degradable plastic bags were used as the markings of survey
lines and recycle pile numbers.
▲"One-pattern operation method" ▲"STP" sewage treatment equipmen
22
Chronic risks:
continuous
high
temperature,
drought, etc.
The rising temperature will
require the Company to
equip more refrigeration
equipment, increasing its
operating costs;
Employees may not be able
to work outdoors for a long
time during the hot season,
which affects its operational
efficiency;
Apply more energy-
efficient refrigeration
equipment;
Scientifically arrange
production plans, deploy
production organizations,
and improve operational
efficiency;
Transformation
risks
Policy and
legal risks
The government may
introduce more stringent
policies and regulations to
mitigate climate change,
which may increase the
workload of business
compliance, and the
number of related lawsuits
or claims;
Closely monitor changes in
environmental laws,
regulations and policies
and respond in a timely
manner;
Technical
risks
Does not identified relevant
risks and not apply in time
low-carbon technologies,
leading to the low-carbon
transformation of our
products lagging behind
peers;
Increase the proportion of
new energy use and
actively carry out
cooperation with peers;
Research new cooperation
methods in technologies
and equipment;
Improve the Company’s
own new technology and
new equipment research
and development ability;
Market risks
Market risks - increase in
raw material and energy
costs;
Decrease in demand for
fossil fuels;
Build an energy
information platform to
monitor and analyze
energy use, and improve
energy management and
control capabilities;
Increase market
development and increase
23
the proportion of external
market business;
Reputational
risk
Obtain negative feedback
from stakeholders due to
poor performance in
climate change and
sustainability.
Enhance the Company's
sustainable development
capabilities and actively
respond to climate change;
Enhance management
transparency in relevant
aspects and respond to the
concerns of stakeholders.
Opportunities Countermeasures
Resource
efficiency
More energy-efficient equipment and
construction and technology;
Incentive of supportive policy.
Actively explore and
apply new technologies,
new equipment, and
new processes to
improve resource use
efficiency and reduce
energy costs;
Identify and respond to
government support
policies and green
projects;
Strengthen the research
and development of
low-carbon
technologies, and
continue to increase the
proportion of green and
low-carbon emission
products;
Identify and participate
in emerging markets;
Promote the
development and
utilization of renewable
energy.
Product and
Services
Research and development of green and low-
carbon products;
Solutions for climate change in the industry.
Market Changes in user preferences and expansion of
green market demand;
Increased demand for integrated energy
services;
International market access.
Adaptability Energy substitution and diversified solutions;
Participation in renewable energy projects.
24
Ecological Protection
The Company has paid attention to protecting the environment of the project operation
sites and has been committed to applying environment-friendly construction technology,
helping the establishment of green and environment-friendly ecological civilization, and
contributing to the beautification and greening of the environment.
Greening barren hills for ecological restoration
The Dongtai Landfill is located in a barren hill on the outskirts of Deyang City and is a
key target of local environmental protection and control. Southwest Petroleum
Engineering Company actively implemented the "Green Enterprise Campaign", to carry
out ecological restoration of the Dongtai Landfill, and transform the landfill and its
surroundings into a demonstration area of ecological restoration that integrates
agriculture, forestry orchards, ecological fishponds, and livestock breeding bases.
Through the treatment of side slope, soil covering of surface, sewage diversion, and
gardening, we have restored a total area of 220 acres, turning the Dongtai landfill into
a green hill with lucid water, and realizing the transformation from a solid waste dump
to an ecological restoration demonstration area.
▲Before ecological restoration ▲After ecological restoration
25
Quality Control
The Company adheres to the quality policy of "quality should always be the first of all
things", keeps in mind the awareness of "great quality", continuously improves the quality
of engineering and service, so as to lay a solid foundation for the promotion of
comprehensive sustainable high-quality development.
Improvement of Management System
During the Year, the Company constantly improved its quality management system and
promoted the quality standardization. We strictly abided by the Standardization Law of the
People’s Republic of China and the Metrology Law of the People’s Republic of China,
revise the Quality Management Measures for Petroleum Engineering Company,
Measurement Management Measures for Petroleum Engineering Company and other
regulations and systems to provide a systematical and standardized guidance for improving
the quality of products, projects and services.
The Company always promotes the standardization of quality management. Through
unified standards, design and equipment, the well site layout and equipment configuration
are standardized to control safety risks in the production process, reduce potential safety
hazards, and improve the quality of engineering operations.
The Company optimized the allocation of engineering team equipment and other resources,
further coordinated the overall market layout, formed three key industrial areas in the west,
southwest, and north China, effectively improving its efficiency of resource allocation
within the system, and enhancing its service support capabilities and market
competitiveness.
Quality Control of Projects
During the Year, the Company formulated and revised the Malfunction Management
Measures for Drilling Engineering, Wellbore Engineering Expert Database Management
Measures, Twelve Measures to Strengthen the Control of Complex Malfunction, and
Quality Management Measures for Petroleum Engineering Company and other quality
management systems to continuously provide scientific guidance on how to improve the
quality management.
Implementation Plan for Wellsite Standardization
In 2020, the Company launched the Implementation Plan for Wellsite
Standardization, which set out the standardization and configuration guidelines for
six sites including drilling standardization, to achieve unified wellsite design,
equipment, and installation, and build a standardized wellsite working environment.
26
The Company strictly implements the engineering quality control in entire process. Before
the construction of the project, we conduct analysis and design, collect information from
adjacent wells, formulate construction design plans and approve these plans level by level,
and provide technical details to the construction team; during construction, we strengthen
the dynamic management and risk management of key wells, and conduct hierarchical
management and level-by-level approvals of downhole faults, provide technical guidance
for key wells and wells with complex malfunctions. The Company keeps abreast of the
well control and engineering technical work of each unit and operation site through
production daily report, weekly report on key wells, and WeChat work groups. It tracks
and analyzes more than 20 key wells every day, and keeps track of the actual conditions of
on-site construction at any time, conducts analysis and research based on the drilling
engineering design to ensure that risks are under control during construction.
In order to strengthen the management and control of engineering failures, the Company
reports the quality of the engineering quarterly, covering the complex failures of all
regional companies and drilling companies, and ranks them by their timeliness of resolving
the complex failures, to supervise and urge each unit to conduct special analysis and rectify
existing problems. In response to failures, we follow "one well, one policy", to carry out
discussion on treatment measures, conduct cause analysis from management, tools,
geology, design and other aspects afterwards, and summarize experience and lessons,
forming a closed-loop of quality control.
The Company promotes the construction of information systems and launches an
information-based production and operation platform, through which, the Company
quantitatively evaluates the timeliness, accuracy, and standardization of production
operations, comprehensively compare the construction conditions of various units,
discovers potential problems in time, and then supervises each unit to continuously
optimize the team structure, strengthen technical support, and strengthen quality
management.
An excellent professional team is the foundation to ensure the quality of the project. In
2020, the Company formulated the Opinions on the Size of Major Professional Teams of
Petroleum Engineering Companies. By cutting the size of major professional teams,
optimizing the structure of qualified construction teams, the Company has optimized
resource allocation, and improved efficiency and benefits, as well as quality assurance.
Service Quality Management
In order to fully understand customer needs, the Company continuously optimizes the
feedback collection mechanism, applies the production scheduling system and market
information management system, to comprehensively improve the efficiency of customer
feedback reception, complaints and suggestions processing and customer return visits, and
to effectively improve service quality.
27
During the Year, the Company paid return visits or normal visits to customers in the system,
used strategic cooperation resources to implement the after-sales service mechanism. We
also constantly improve the supervision system, by which, in project decision-making, we
establish the ledgers covering basic situation of projects decided by regional (professional)
companies and projects decided by professional business units, so as to achieve all-round
management and supervision of market bidding. At the same time, the Company
strengthens process control, holds accountability for violations, and strives to improve
service quality throughout the entire process. The Company attaches great importance to
the improvement of service quality and efficiency by accurately identifying customer needs,
focusing on coordinating the guarantee of internal key market teams to provide high-
quality services with the best team, the best equipment, and the most applicable technology.
"Quality Day" and "Quality Month" campaigns
In order to enhance quality awareness and strengthen the construction of quality culture,
the Company has organized activities such as "Quality Day" and "Quality Month" in
2020. The Company extensively carried out quality publicity, organized quality
management knowledge competitions, and other quality-themed competitions, focusing
on the theme of "Quality is the life of an enterprise” and considering the actual situation
of fighting the epidemic, so as to fully implement quality responsibilities, and guarantee
the quality of product, service and engineering. The development of quality-related
campaigns has further enhanced the quality awareness of all employees, established the
sense of responsibility of "everyone is responsible for quality", deepened the concept of
strengthening a company by promoting its quality, forming an atmosphere in which
everyone pursues quality and everyone creates quality and all employees are
encouraged to independently practice the concept of "quality first, benefit first", thus
promoting the Company's comprehensive sustainable and high-quality development.
▲ Promotional slogan and promotional poster for quality month event
28
Operation in Compliance with Laws and Regulations
Compliance operation is the foundation of the Company's steady development. To
guarantee the Company's sustainable development, the Company strictly follows national
laws and regulations, carries out in-depth construction of party conduct and integrity,
implements intellectual property management, observes customer information security
regulations, and improves supplier management system.
Integrity Development
The Company always attaches great importance to integrity building, by strictly abiding
by the Audit Law of the People's Republic of China, Provisions on the Integrity of State-
owned Enterprise Leaders, Accountability Regulations of the Communist Party of China
and other relevant laws and regulations. In addition, the Company forms the Working Rules
of the Commission for Discipline Inspection and other regulations to actively carry out
daily supervision and strengthen the implementation of accountability system.
The Company constantly improves its supervision and management mechanism. The
supervisory committee revises the list of daily supervisory responsibilities and supervises
the relevant departments performing their duties according to orders. At the same time, the
Company organizes meetings of the supervisory committee from time to time to
communicate and exchange oversight findings and develops extended governance for
prominent problems. In 2020, the Company has carried out 11 major supervision projects
including capital risk investigation, special supervision of compliance management, and
selection and appointment of cadres. The Company has integrated the supervisory forces
of various districts across the country to establish cooperation areas for joint prevention
and governance of integrity risks in Dongying and Hubei. At the same time, the Company
actively explores the sharing of external supervision resources, establishes a daily
supervision mechanism for the prevention and governance of integrity risks with the
Northwest Bureau, promots joint education, key link control and disciplinary review joint
mechanisms, to jointly create a clean and transparent external market environment.
The Company has established channels for reporting letters and visits, including reporting
telephone numbers, reporting mailboxes, and reporting boxes. The Company has
formulated special handling procedures and strictly followed the principles of “centralized
management, collective deliberations, scientific authorization, full-process tracking, and
closed-loop operation” to register reported cases, verify clues to the problem, and promptly
report the results to the real-name reporter. In this process, the Company strictly keeps the
personal information of reporters confidential.
The Company conducts anti-corruption training every year, and carries out integrity
education through document notifications, holding warning education conferences, and
watching warning education videos. In 2020, the Company compiled the Regulations and
Discipline Manual to sort out typical cases, publicize and implement disciplinary
29
regulations, and dynamically displayed them through the Company's website, to enhance
employees' awareness of anti-corruption. During the Year, the Company carried out two
employee anti-corruption education and training activities。
Protection of Intellectual Property Rights
The Company strictly complies with the Trademark Law of the People's Republic of China,
the Patent Law of the People's Republic of China and other laws and regulations. The
Company also formulates the Intellectual Property Management Measures and other rules
and regulations to provide standardized guidance for the application and use of intellectual
property rights. While protecting self-owned intellectual property rights, we try to avoid
infringement of other parties' intellectual property rights.
In order to strengthen the management of technology trade, the Company formulated the
Administrative Measures for the Technology Trade of Petroleum Engineering Companies
(Trial) during the Year to expand the application scope of independently developed
technologies and regulate the transfer, licensing, services and consulting activities related
to technologies.
The Company constantly promotes the commercialization of technological achievements
and improved the efficiency of commercialization to boost its productivity. In 2020, the
Company formulated the Administrative Measures for Promoting the Commercialization
of Scientific and Technological Achievements (Interim) and the Plan for the
Commercialization of Scientific and Technological Achievements of the Company in 2020,
to focus on promoting the industrialization and commercial application of medium- and
high-end technologies and equipment including node seismic instruments, SINOMACS
ATS rotary steering system, drilling parameter meters, key drilling fluid additives, high-
power downhole tractors.
During the Year, the Company applied for a total of 760 patents, including 361 invention
patents; obtained 505 authorized patents, including 75 invention patents.
Protection of Information Security
The Company strictly follows the Network Security Law of the People's Republic of China,
Management Measures for the Information Security Protection and other relevant laws and
Research on Patent Strategy of Tackifier for Drilling Fluid and Filtration
Reducer for Drilling Fluid
In 2020, the Company focused on the research on patent strategy of Patent Strategy
of Tackifier for Drilling Fluid and Filtration Reducer for Drilling Fluid to keep
abreast of the technology status and development trend, formulate intellectual
property R&D, application and protection strategies, guide R&D direction, and
protect innovation results.
30
regulations in its information security management. The Company has added a
confidentiality clause to its management regulations, requiring regional (professional)
companies to strictly protect the source and content of sensitive confidential information
when specifically implementing customer information management. The Company has
strengthened the information security management in the production and operation process
to prevent the leakage of information and data of suppliers, partners and customers. The
Company regularly supervises and inspects the confidentiality of secret-related personnel,
and handles violations and leaks.
Management of Supply Chain
The Company continued to standardize supplier management to protect the legitimate
rights and interests of suppliers. To this end, we have formulated relevant regulations and
systems such as the Management Measures for Material Supply, Management Measures
for Material Purchase, Management Measures for Material Purchase and Supply Resources,
Management Measures for the Supervision and Random Check of the Quality of Purchased
Materials, based on which, all regional (professional) companies formulated
implementation rules to jointly improve the Company's supply system.
In the supply chain management system, the Company has established a complete dynamic
management mechanism for admission, selection, review, information feedback and
withdrawal. In the daily management process of suppliers, we publicized compliance
requirements to suppliers and required them to be honest and operate in accordance with
the law. We have identified suppliers’ environmental and social risks, and made suppliers’
qualifications in health, safety, and environmental protection as one of the conditions for
admission. At the same time, the Company regularly conducted supplier qualification
reviews and on-site inspections, and selected suppliers based on such results.
The Company continues to promote green procurement, and the "green corporate
campaign", i.e. purchasing environment-friendly and low-carbon materials, using green
logistics and green packaging. In 2020, the Company formulated the Management
Measures for Green Procurement of Materials (Trial) and Management Regulations for
Green Procurement of Materials, etc., for regional (professional) companies to actively
implement green procurement in their operation. For example: the Shengli engineering
project gave priority to purchasing high-efficiency products and urged suppliers to use
packaging that meets environmental protection requirements when selecting suppliers; the
Southwest engineering project promoted "small-to-large" green packaging in the
procurement of lubricants and grease, reducing packaging waste; the East China project
has increased the promotion and application of environment-friendly new materials in
camping houses and environment-friendly toilets.
31
Staff Management
The Company regards employees as the cornerstone of corporate development, adheres to
the core values of "being people-oriented, and pursuing good quality, innovation and win-
win results", and has always been committed to working with employees to build a diverse
and inclusive corporate culture. We protect the legitimate rights and interests of employees,
establish a fair and competitive salary and welfare system, focus on the long-term training
of employees, and enable the development and promotion of employees.
Legal Employment
The Company strictly kept in line with the Labor Law of the People's Republic of China,
the Labor Contract Law of the People's Republic of China, the Law of the People’s
Republic of China on Prevention and Control of Occupational Diseases, Special Provisions
on Labor Protection for Female Employees and other relevant laws and regulations, and
implemented the philosophy of equality, mutual trust, consultation, and win-win, to
establish a legal employment relationship with each employee.
The Company eliminated all inequality and discrimination caused by ethnicity, race,
gender, age, family status and other factors, and protected the rights and benefits of female
employees during pregnancy, childbirth, and breastfeeding. We respected the customs and
culture of ethnic minorities and ensured that employees of ethnic minority can enjoy their
traditional festivals. During the Year, the Company did not engage in violations of laws
and regulations such as employment of child labor and forced labor, employment
discrimination, gender discrimination, and occupational discrimination.
At the same time, we actively responded to the country's call for "stabilizing jobs and
expanding employment", integrated employment expansion with poverty alleviation,
increased the recruitment of college graduates by recruiting graduates from poor and
designated areas called for assistance.
32
Employment Data
Indicator 2020
Type of
employment
Management personnel 7,731
Professional personnel 31,401
Skilled operators 32,604
By gender Male 61,107
Female 10,629
By age 35 and below 8,414
35-45 (excluding 45) 22,312
45-50 19,394
50 and above 21,616
By region China 67,466
Overseas 4,270
Note: Data statistics include the headquarter, branches and subsidiaries of Sinopec Oil
Services.
Optimization and revitalization of human resources
In order to fully revitalize internal resources, the Company has scientifically
formulated the implementation plan for optimizing and coordinating human
resources, and the Incentive Measures for the Coordination and Optimization of
Employment, to promote the orderly flow of personnel through formation,
modularization, and flexibility; supervised and urged all units to be strictly follow
the staff configuration requirements of the grass-roots team, under which grass-
roots teams should be equipped with key position personnel and sufficient
production personnel to ensure legal employment and work safety. During the Year,
the Company actively guided the flow of internal talents, increased the proportion
of professional and skilled operation teams, optimized the employment structure,
and laid a solid foundation at grassroots.
33
Salary and Benefits
The Company has built a scientific and fair salary system accordance with the Company's
operating conditions, providing employees with a fair market-competitive salary and
benefits. In 2020, the Company constantly improves the remuneration incentive
mechanism, revises the Performance Appraisal and Work-Performance-Linked Appraisal
Measures, strengthens the implementation of performance appraisal, and emphasizes the
combination of organizational performance and employee performance, in order to
mobilize their motivation and stimulate their enthusiasm at work.
The Company attaches great importance to employee welfare. On the basis of meeting the
basic social security and welfare standards of countries, regions and overseas places where
we operate, we provide employees with health checkups, psychological consultations,
corporate annuities, supplementary medical insurance and other benefits; for overseas
expatriates, in addition to the benefits mentioned above, they have an extra holiday when
they return to their home country.
Employee Activity
We advocate work-life balance by creating a happy and heart-warming workplace and
providing employees with a platform with variety of leisure activities. In 2020, we have
organized a series of employee activities, including but not limited to sports activities of
table tennis, badminton, basketball games and group mountain climbing, cultural activities
of poetry reading, speech contests, and entertainment activities of employees’ office
exercises, walking, in which the majority of employees actively participated.
At the same time, the Company organizes dinners on special holidays, and prepares
catering according to the customs and beliefs of employees of different nationalities to
deliver holiday greetings and warm care. Through a variety of employee activities, we
enhance collective cohesion, increase employees' sense of belonging, and build a
harmonious corporate culture.
34
▲ Badminton competition
▲ Mountaineering Activity of "Continuous
Tackling and Creating Effects Cup"
▲ Office exercises ▲ Festive dinner
Employee Development
The Company has attached great importance to the long-term development and continuous
training of employees, firmly established the concept of talent development, and actively
implemented the Company's talent training strategy. We constantly improve the talent
promotion system to point out the direction for employee development, carry out job
competition and competitive selection, and optimize the incentive mechanism to stimulate
innovation and enthusiasm, thereby promoting the common development of talents and the
Company.
We have provided employees with a wealth of training resources and carried out training
activities for talents, to comprehensively improve their skills, knowledge and management
capabilities. The Company has established a training center to provide systematic support
for employee training. We use the training center as a training ground for actual combat
training, in order to inherit the spirit of petroleum workers, consolidate its own technical
skill, and build an iron army of petroleum engineering.
The Company has promoted and strengthened learning through mobile terminal. With
scientific and technological means, we promoted MOOC, video and telephone conference
35
system, Zhongyuan Project’s "Tiejun E School" and other mobile terminal learning
channels, improved the remote training system to improve the efficiency of remote training.
During the epidemic, in order to ensure the effective development of employee training,
we expanded online and offline training methods to carry out systematic training for
employees.
The Company focuses on key talent training and demonstration training for talents in some
key positions, while its affiliated organizations focuses on job adaptability training for
frontline personnel, training for various qualifications and training for talents in key
positions. In 2020, more than 48,000 people have been trained.
HSSE management professional English training courses for international
petroleum engineering drilling and workover
In order to assist in the construction of the HSSE management system for overseas
drilling and workover projects, the Company launched a professional English
training course for HSSE management in international petroleum engineering
drilling and workovers, and hired a team of teachers composed of full-time and part-
time teachers who have been engaged in professional English training for many years
and have excellent teaching quality to conduct English teaching, in which Duan
Xinsen, HSSE director of Saudi Aramco, was invited to explain the investigation into
and report on accidents. Zhang Guangqin, chief expert of the Zhongyuan Oilfield
Training Center, systematically explained the HSSE management system of overseas
drilling and workover projects, related laws and regulations, and process
management and other knowledge modules. A combination of DingTalk live
broadcast, conference seminars and online guidance and answering questions in the
training course was adopted to achieve the simultaneous training of English language
and professional skills, and to effectively improve the foreign language skills of the
staff.
36
Shengli Petroleum Engineering Company organized 24 online expert lectures
and master lectures
In order to improve the professional knowledge of skilled operators and consolidate
the foundation of operating skills, Shengli Petroleum Engineering Company invited
15 skilled masters to conduct training on professional knowledge and operating
skills on drilling, downhole, logging, mud logging and other related jobs. In 2020,
Shengli Petroleum Engineering Company held 14 "expert lectures", training nearly
8,000 trainees; and 10 “masters lectures”, training nearly 4,000 trainees. Among
them, more than 8,000 engineering technical cadres, drillers, and technicians or
above have been trained, which has effectively improved the professional quality
and innovation ability of managers and technicians at all levels.
▲ Expert lectures ▲ Master lectures
37
Zhongyuan Petroleum Engineering Company carried out mobile phone trainings
with "Tiejun E School"
The Company actively has explored the learning and training model of "Internet +
mobile + training". Zhongyuan Petroleum Engineering Company has innovated and
developed the "Tiejun E School" mobile online training platform to realize the
integration of online learning, self-check and self-test, examination and assessment,
statistical summary, evaluation and analysis and other functions, providing employees
with a more convenient and comprehensive training method. As of the end of December
2020, a total of 18,097 people had registered, including all front-line employees, 3262
exams posted, with 80,772 people taking, and 1.76 million individual self-test exams
were conducted. With its sound platform functions and abundant training resources,
"Tiejun E School" has become the first-choice platform for training and assessment of
front-line employees, and it will continue to promote the steady improvement of the
overall quality of the team.
▲ "Tiejun E School" mobile phone training and Internet training
38
Community Investment
The Company has always adhered to "integrity norms, win-win cooperation, and giving
back to the local area", and actively fulfilled its corporate social responsibility. We have
paid attention to community development, given back to the community, and
enthusiastically participated in public welfare undertakings such as environmental
protection, poverty alleviation, voluntary activities and emergency rescue. In overseas
regions, we have also actively practiced social responsibility and carried out public welfare
activities to demonstrate corporate citizenship.
During the Year, the Company has donated a total of RMB910,000 to external charities
and invested RMB27,238,300 in poverty alleviation.
Environmental Public Welfare
The Company carried out public welfare activities in environmental protection by taking
practical actions to protect the environment, in order to facilitate the construction of a green
and environment-friendly ecological civilization and contribute to the beautification and
greening of the environment.
Protect the green home
The Company has been committed to cultivating young people's green environmental
protection concept, raising their awareness of safety and environmental protection,
caring for the environment, saving resources, and protecting green homes. On May 30,
the Youth League Committee of Wuhan Prospecting Company organized its members
to participate in the theme activity of "Aspirational Youth · Green Environmental Public
Welfare" in Jianghan Oilfield, in which the young people cooperated with community
sanitation workers and cleaners to clean fallen leaves and weeds to serve the residents.
▲"Aspirational Youth · Green Environmental Public Welfare"
39
Community Public Welfare
The Company has been dedicated to improving people's livelihood, actively carrying out
poverty alleviation, volunteer services and emergency rescue, etc., to extend love, pass on
warmth, and work with others to build a harmonious society.
Poverty Alleviation
The Company actively responds to the Group's Notice on Further Strengthening Poverty
Alleviation through Consumption, establishes close ties with poverty-stricken areas to
promote poverty alleviation. Companies in various regions have carried out paired
assistance with certain areas, signed joint construction agreements, and clarified assistance
plans and measures. At the same time, the Company organized the purchase of poverty
alleviation materials to promote local economic development and provided voluntary
science popularization for poverty-stricken areas to help their education development.
Promote science popularization for poverty alleviation -- popularize science on
campus in northern Tibet
On September 29, 2020, the party branch of an earthquake team in northern Tibet
visited an elementary school in Qingdu Township, Xietongmen County, Rikeze City,
and gave a special lesson on the popularization of seismic exploration knowledge.
The party branch started with interesting scientific stories such as "lightning first,
thunder second", "I do CT for the earth", and used easy-to-understand methods to let
local residents understand the work process of the construction team. This lecture
stimulated the enthusiasm of Tibetan students in learning, strengthened local
integration, and further deepened the profound friendship between the Han people
and Tibetans. For poverty alleviation, we must put knowledge first. We will continue
to impart knowledge to the poor and lay the foundation for poverty alleviation.
▲Popularize science on campus in northern Tibet
40
Volunteer Activity
The Company persists on promoting voluntary activities to convey warmth, upholding
traditional virtues, and helping the construction of civilized cities. During the Year, we
organized activities such as sending blessings and warmth to the elderly in the community,
popularizing petroleum science knowledge on campus, and volunteering for farming to
spread civililization, dedicate love, and serve the society with practical actions.
Jiangsu drilling volunteers served the community
The "Diamond Flower" volunteer service team of Jiangsu Drilling Company has
been entitled the name of "my favorite volunteer service team in Jiangsu Province".
Adhering to the concept of "in building city civilization, volunteers are the first", the
volunteer service team took the lead in organizing the Youth Volunteer Service
Express in the Shaobo Cooperation Zone of the Communist Youth League to enter
into the community, serving nearly a thousand people. During the Year, the team
carried out a volunteer activity themed "Caring Companion, Warm Sunset" to send
blessings to the elderly in the community, convey warmth, and show a good
corporate image, which was widely praised.
▲Jiangsu drilling volunteers served the community
41
Emergency Rescue
The Company has done a lot to contribute to the society and deliver warm care. We
leverage our own technical advantages to participate in the rescue of fires, mine disasters
and other emergency accidents by providing technical support and solving difficulties.
Volunteer farming
The party branch of North China Petroleum Engineering Company made use of
production intervals to organize "Youth Commandos" to walk into the farmhouse, and
volunteered to help local villagers carry feed, repair courtyard walls, and thresh corn,
which further harmonized the Company-local relationship and won praise from
villagers.
▲Volunteer service of helping fellow villagers to dry food by young people
Mine rescue
Shengli Petroleum Engineering Company has participated in the rescue of the Hushan
gold mine accident in Qixia, Yantai. On January 10, 2021, an explosion occurred in the
Wucailong gold mine under construction in Xicheng Town, Qixia, Shandong Province
due to illegal storage and use of civil explosives and illegal fire operations at the
wellhead. Shengli Petroleum Engineering Company sent experts immediately to
support the rescue. Arriving at the site, the Company's rescue team formulated technical
solutions for drilling speed increase, trajectory measurement, directional control, and
complex prevention in time, and effectively solved the problems of slow drilling speed,
stuck drilling, and water production due to complex geological conditions in the mining
area. Due to the lack of special equipment at the rescue site, the Company deployed
drilling tools, directional instruments, drill bits and other materials overnight to fully
support the rescue. After the unremitting efforts of all rescuers, 11 trapped miners were
safely rescued from 11:13 to 15:18 on the 24th. This rescue has fully demonstrated the
Company's spirit of actively giving back to the society and conveyed the care and love
closely connected with the local community.
42
Overseas Responsibility
The Company also actively performs its social responsibilities and obligations overseas.
We respect the customs and religious beliefs of the place where we produce and operate.
We promote the integration of multi-ethnic cultures and live in harmony with local people.
We care about people's livelihood, maintain good communication with local communities,
and practice overseas social responsibilities to pass on warmth.
Fire rescue
When fires in surrounding communities suddenly occurred, the Company actively
carried out emergency rescue, effectively ensuring the safety of people's lives and
property.
On March 26, employees of the acid fracturing team of the Southwest Petroleum
Engineering Company's Downhole Operations Branch were on their way to the
construction site but discovered that a farmer’s house was on fire. With great courage,
these employees carried out rescue in time, overcame the difficulties, and put out the
fire completely after more than half an hour. On June 5, a wildfire broke out near the
fracturing site of the second section of Well Weiye 39-4HF. After discovering the fire,
the fracturing team of the Downhole Operation Branch of Southwest Petroleum
Engineering Company immediately started firefighting and quickly arranged for
deployment. The rescue personnel worked closely together, complemented each other
based on the labor division according to the emergency drill procedures, laid the fire
hoses in place quickly, so that the wildfire was put out soon.
▲Firefighting at farmer’s house ▲Wildfire rescue
43
Pakistan project "sending medical service to the community"
The Company’s Pakistan project team carried out an activity of “sending medical
service to the community”. In order to deal with the traffic difficulties and diseases
caused by the extreme cold weather in Huzdal, Balochistan, our local construction team
organized personnel to reach the countryside and arranged medicines, equipment and
ambulances to treat local residents, helping local residents solve the difficulty of having
access to medical care caused by bad weather conditions.
▲Sent medical service to the community
44
Epidemic Prevention and Control
At the beginning of 2020, the rapid spread of the Coronavirus Disease (COVID-19) has
brought pain and challenges to the world. In order to fight the epidemic, the Company
established an epidemic prevention and control team and a related system as soon as
possible to comprehensively guarantee the health and safety of employees at home and
abroad. Besides, the Company adopted a scientific mode to promote the resumption of
work and production. Meanwhile, the Company demonstrated its corporate citizenship by
actively participating in the front line of epidemic prevention and control, and assisted the
global fight against the epidemic by supporting the work of frontline medical staff and
donating money and materials.
During the Year, the Company's donated a cumulative amount of RMB14,405,600 for the
epidemic prevention and control.
Health and Safety Assurance
The Company put the protection of employees' lives and safety as its top priority. Faced
with the outbreak of the epidemic, the Company quickly established a three-level response
mechanism for dynamic monitoring of abnormal situations, daily reports of major
situations, and zero-infection reports of epidemic, and issued emergency management
systems such as the Emergent Notice on Further Strengthening the Prevention of Novel
Coronavirus Epidemic to provide a comprehensive guidance on epidemic prevention and
control.
In terms of epidemic prevention and protection strategies, we adjusted related measures in
a timely manner based on changes in the epidemic development situation. At the beginning
of the epidemic, we ensured the supply of protective materials for employees in an all-
round way, regularly disinfected office areas, construction sites, and living camps, and
adopted remote working mode to minimize unnecessary outings for employees. As the
epidemic was gradually brought under control, we strictly abided by the requirements of
local governments and arranged reasonable resumption of work. Upon the resumption of
work, we also implemented a series of prevention and control measures to protect
employees' physical and mental health, including but not limited to: strengthening the
check of on-site workers’ health, establishing health cards for all employees, and
conducting health monitoring for all employees; strengthening publicity and education on
epidemic prevention and control, and strengthening management on individuals’ daily
behavior, implementing personal protection requirements, and handling abnormal
situations; strictly implementing dynamic monitoring of personnel flow, strengthening the
control over the entry and exit of on-site personnel to reduce potential infection risks and
work with employees to prevent and control the epidemic; providing employees with a 24-
hour psychological counseling hotline to ensure their mental health and eliminate their
anxiety and panic.
45
In order to ensure the orderly operation of the Company's overseas epidemic prevention
and control, we have always paid attention to the progress of overseas epidemic, strictly
implemented the grid management of epidemic prevention and control, in order to ensure
the orderly operation of the Company's overseas epidemic prevention and control. At the
same time, for returning employees, we strictly followed national and local policy
requirements on isolation, nucleic acid testing, and antibody testing, to avoid overseas
import risks.
▲ Disinfection of certain places ▲Strengthening the safety protection of
the construction site
Community Donations
The Company has bravely assumed social responsibility during the critical period of the
epidemic prevention and control. It sent protective materials and warm care to the medical
staff struggling on the front line to fully support the epidemic prevention and control, and
carried out a series of volunteer service activities to effectively support the local
government and community in epidemic prevention and control, to enhance the
Guarantee protection materials supply
In order to ensure the timely supply of epidemic prevention materials for employees,
the Company immediately established a special team to ensure the supply of epidemic
prevention materials. This team was responsible for collecting information on the
Company's epidemic prevention and control material inventory from all over the
country every day, and prepared materials in a timely manner to ensure sufficient
supplies. In 2020, the Company has distributed 9.59 million masks, 316,000 bottles of
disinfectant and alcohol, and more than 6,000 thermometers to employees to ensure
that the prevention and control of the epidemic could be carried out in a smooth and
orderly manner.
46
relationship between enterprises and local communities, and to demonstrate the sense of
responsibility of state-owned enterprises.
We were in action to guard medical staff
In order to ensure the supply of materials for front-line personnel in the fight against the
epidemic, we followed the principle of being "voluntary and open" to raise funds for
medical supplies at the frontline. In 2020, the Company donated a total of 35 boxes of
1648 medical isolation gowns to Hubei Third People's Hospital, passing on its profound
care to the front line of medical workers, and composing the song of doctors'
benevolence and fighting against the epidemic.
▲Donate medical supplies ▲Employees’ active participation in
donations to fight the epidemic
Volunteer service activity of “supporting epidemic prevention and control”
The Company actively organized volunteers from various affiliated organizations to
carry out anti-epidemic actions. Through the establishment of a volunteer service
team, the Company communicated with the community and local government
departments thoroughly to assist in the community voluntary services and epidemic
prevention and control. For example, Petroleum Engineering Construction Company
has organized volunteer service activities involving the Company's 10 grassroots
organizations and more than 200 employee volunteers throughout the year. Wuhan
Prospecting Company organized a volunteer team of party members to deliver
vegetables to the quarantined community.
▲Volunteer served the community ▲Party members sent vegetables to
quarantined communities
47
Anti-epidemic linkage at home and abroad
During the outbreak of the domestic epidemic, the Company's overseas institutions
actively cooperated to support the domestic anti-epidemic. The Company's Pakistan
construction project department prepared 20,000 masks and protective glasses from the
local area and handed them to the Karachi Chinese Enterprise Association in Pakistan.
These materials were delivered to Wuhan by special planes, which was the hardest hit
area of epidemic, to help the motherland fight the Covid-19 epidemic.
At the same time, in response to the situation that employees were unable to return to
the country after the outbreak of the overseas epidemic, the Company actively carried
out a series of actions to extend care for employees, including online psychological
counseling lectures and seminars, and visits and condolences to the family members of
overseas employees, etc., to encourage employees who stick to their posts during the
epidemic, and make them feel the warmth in the corporate family.
▲Paid visits to employees’ family members ▲Overseas anti-epidemic supplies
48
Appendix：Environmental, Social and Governance Reporting Guide
Issues Description of Issues Corresponded chapter
in the report
Subject Area A. Environmental
Aspect A1: Emissions
General
Disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
relating to air and greenhouse gas emissions, discharges into
water and land, and generation of hazardous and non-hazardous
waste.
Environmental
Management
KPI A1.1 The types of emissions and respective emission data. Environmental
Management
KPI A1.2
Greenhouse gas emissions total (in tonnes) and,where
appropriate, intensity(e.g. per unit of production volume, per
facility).
Environmental
Management
KPI A1.3
Total hazardous waste produced (in tonnes) and, where
appropriate, intensity (e.g. per unit of production volume, per
facility).
Environmental
Management – Clean
Production
KPI A1.4
Total non-hazardous waste produced (in tonnes) and, where
appropriate, intensity (e.g. per unit of production volume, per
facility).
Environmental
Management – Clean
Production
KPI A1.5 Description of measures to mitigate emissions and results
achieved.
Environmental
Management – Clean
Production
KPI A1.6
Description of how hazardous and
non-hazardous wastes are handled, reduction
initiatives and results achieved.
Environmental
Management – Clean
Production
Aspect A2: Use of Resources
General
disclosure
Policies on the efficient use of resources, including energy, water
and other raw materials.
Environmental
Management –Saving
Resources
49
KPI A2.1
Direct and/or indirect energy consumption by type (e.g.
electricity, gas or oil) in total (kWh in ‘000s) and intensity (e.g.
per unit of production volume, per facility).
Environmental
Management – Use of
Resources
KPI A2.2 Water consumption in total and intensity (e.g. per unit of
production volume, per facility).
Environmental
Management –Saving
Resources
KPI A2.3 Description of energy use efficiency initiatives and results
achieved.
Environmental
Management –Saving
Resources
KPI A2.4 Description of whether there is any issue in sourcing water that is
fit for purpose, water efficiency initiatives and results achieved.
Environmental
Management –Saving
Resources
KPI A2.5 Total packaging material used for finished products (in tonnes)
and, if applicable, with reference to per unit produced. Not applicable
Aspect A3: The Environment and Natural Resources
General
disclosure
Policies on minimising the issuer’s significant impact on the
environment and natural resources.
Environmental
Management – Clean
Production
KPI A3.1
Description of the significant impacts of
activities on the environment and natural
resources and the actions taken to manage them.
Environmental
Management – Clean
Production
Subject Area B. Social
Employment and Labour Practices
Aspect B1: Employment
General
Disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
relating to compensation and dismissal, recruitment and
promotion, working hours, rest periods, equal opportunity,
diversity, anti-discrimination, and other benefits and welfare.
Staff Care
KPI B1.1 Total workforce by gender, employment type, age group and
geographical region. —
KPI B1.2 Employee turnover rate by gender, age group and geographical
region. —
Aspect B2: Health and Safety
50
General
Disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
relating to providing a safe working environment and protecting
employees from occupational hazards.
Occupational health and
Safety Assurance
KPI B2.1 Number and rate of work-related fatalities. —
KPI B2.2 Lost days due to work injury. —
KPI B2.3 Description of occupational health and safety measures adopted,
how they are implemented and monitored.
Occupational health and
Safety Assurance
Aspect B3: Development and Training
General
disclosure
Policies on improving employees’ knowledge and skills for
discharging duties at work. Description of training activities.
Staff Care–Development
and Training
KPI B3.1 The percentage of employees trained by gender and employee
category (e.g. senior management, middle management). —
KPI B3.2 The average training hours completed per employee by gender
and employee category. —
Aspect B4: Labour Standards
General
disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
relating to preventing child and forced labour.
Staff Care–
Employment
KPI B4.1 Description of measures to review employment practices to avoid
child and forced labour. —
KPI B4.2 Description of steps taken to eliminate such practices when
discovered. —
Operating Practices
Aspect B5: Supply Chain Management
General
Disclosure
Policies on managing environmental and social risks of the supply
chain. Operation in compliance
with laws and regulations
51
- Management of Supply
Chain
KPI B5.1 Number of suppliers by geographical region. —
KPI B5.2
Description of practices relating to engaging suppliers, number of
suppliers where the practices are being implemented, how they
are implemented and monitored.
—
Aspect B6: Product Responsibility
General
Disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
relating to health and safety, advertising, labelling and privacy
matters relating to products and services provided and methods of
redress.
Quality Control
KPI B6.1 Percentage of total products sold or shipped subject to recalls for
safety and health reasons. Not applicable
KPI B6.2 Number of products and service related complaints received and
how they are dealt with. —
KPI B6.3 Description of practices relating to observing and protecting
intellectual property rights.
Operation in Compliance
with Laws and
Regulations - Protection
of Intellectual Property
Rights
KPI B6.4 Description of quality assurance process and recall procedures. —
KPI B6.5 Description of consumer data protection and privacy policies,
how they are implemented and monitored.
Operation in Compliance
with Laws and
Regulations - Protection
of Information Security
Aspect B7: Anti-corruption
General
Disclosure
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations that have a
significant impact on the issuer
Operation in Compliance
with Laws and
Regulations – Integrity
Development
52
relating to bribery, extortion, fraud and money laundering.
KPI B7.1
Number of concluded legal cases regarding corrupt practices
brought against the issuer or its employees during the reporting
period and the outcomes of the cases.
—
KPI B7.2 Description of preventive measures and whistle-blowing
procedures, how they are implemented and monitored.
Operation in Compliance
with Laws and
Regulations – Integrity
Development
Community
Aspect B8: Community Investment
General
Disclosure
Policies on community engagement to understand the needs of
the communities where the issuer operates and to ensure its
activities take into consideration the communities’ interests.
Community Investment
KPI B8.1 Focus areas of contribution (e.g. education, environmental
concerns, labour needs, health, culture, sport). Community Investment
KPI B8.2 Resources contributed (e.g. money or time) to the focus area. Community Investment
